An Additional Warning About the Economic Slowdown
March 22, 2020
Some of the on-air pundits, particularly those favorably disposed towards the administration, are talking about a fairly rapid V shaped recovery as the virus gets under control and as the “fundamentally strong” U.S. economy weathers this temporary setback. That projection might lead people to think “Oh, I’ll just hang on and things will soon be returning to normal.” They won’t. Too many people are going to lose their jobs. The gig economy (e.g. Uber drivers, food trucks, handymen, landscapers and gardeners, personal trainers and masseurs) is going to be crushed. As for more traditional workers, I just researched some employment numbers: a total of over 25 million people work in the restaurant, hotel, airline, cruise, performing arts, amusement park and, most importantly, retail sectors, some of the most vulnerable areas of our economy: the sectors that are essentially being shut down by COVID. If only 1/4 of those people are laid off that’s over 6 million people newly unemployed ). How many hundreds of thousands of businesses are going to go bankrupt? Even if the government is able to very quickly approve dramatic relief measures, it is likely that figuring out how to administer them will cause needed help to arrive too late for millions. Furthermore, even if we’re lucky enough to see a significant abatement of the virus in the spring, how probable is it that people will hop back onto airplanes and cruise ships, gamble in Vegas, gambol at Disney World, or attend mass gatherings of any kind when they’re warned that the virus is still lurking, with a likely fall comeback?
Am I being a Cassandra here?
Cassandra prophesied the fall of Troy and wasn’t believed. Her name has become synonymous with disastrous prognostications. What is often forgotten is that her prophesies ALWAYS came true.